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Chinese electric cars in Europe: market distortion through subsidies?
The debate about electric cars between Germany and China is becoming more intense. Find out more about the competition and the impact on trading. No desire for trade war! #Germany #China #Electric cars #Trade relations
Chinese electric cars in Europe: market distortion through subsidies?
The MG4 symbolizes the distortion of the market caused by government subsidies in China. SAIC sold a total of 11,312 electric cars from brands such as MG and Maxus in January and February, which is fueling competition with Germany. Nevertheless, the importance of Chinese electric cars in Europe is still quite low overall, with only around a fifth of new registrations being made in China.
The dependence between Germany and China is mutual and inevitable, as German companies also produce in China and Chinese companies are expanding their presence in Germany and Europe. The Association of the German Automotive Industry (VDA) is clearly against punitive tariffs because products are manufactured in China, but profits are recorded in Europe.
However, China faces economic challenges, including overcapacity and weak demand. Uncertainty about government support and the potential for undue market influence through subsidies raises concerns about the long-term stability of the market.
Experts like Professor Stefan Bratzel emphasize the need to innovate in Europe in order to compete with China. The EU could introduce measures such as a supply chain law and ecological assessment criteria to promote the value creation of electric cars in Europe and avoid protectionism.
Despite the intensive interconnectedness of trade relations, it is crucial for Germany and China to concentrate on strengthening their own electric car production. The research and production of battery cells and systems should be the focus in order to remain competitive in the long term and shape the market dynamics between the two countries.